Continue Reading Add comment December 30th, 2008
Home prices posted another record decline in October, falling 18% in October compared with a year earlier, according to a closely watched monthly report released Tuesday. Read more »
Continue Reading Add comment December 30th, 2008
Where were you in March 2004? Because that’s the last time home prices were as low as they are now, according to the Standard & Poor’s/Case-Shiller 20-City Composite Home Price Index for October 2008, which was released on Dec. 30.
Back then, prices were going up. Now they’re going down. The nation’s mood could not be different. Euphoria then; a deep purple funk now.
So back to the question. Where were you in March 2004? Negotiating for a nifty option ARM? Scouting out a home in a new subdivision in the remotest exurbs? At the time–and this was before things really got crazy on prices and crappy mortgages–everything seemed possible.
I searched the Factiva database for housing-related articles that appeared in local newspapers in March 2004. Here are a few I found.
From The Desert Sun newspaper in the Coachella Valley, east of L.A. and San Diego:
“World Development, the Palm Desert company putting up Waring Palms, is having a hard time keeping up with Coachella Valley’s sizzling demand for new homes, said Executive Vice President Scott Stokes. He and other builders say they can’t find enough skilled workers in the valley to build as fast as customers are buying their homes.”
From The Patriot Ledger of Quincy, Mass.:
“Another big boom emanated from the South Weymouth Naval Air Station property this week, but it had nothing to do with planes.
“Rumors started flying that 3,000 or 4,000 homes could be part of plans for the 1385-acre property that lies in Weymouth, Abington and Rockland. Numbers like that scare the wits out of local residents and officials because of the impact so many homes would have on local services. The reaction was predictable.”
From the San Antonio Express-News:
“Jaime Arechiga - a Laredo land developer who expanded his horizons to San Antonio four years ago - is carving up lots all over Bexar County and New Braunfels.
“‘I’m in the community. I’m here to stay,’ said Arechiga, who now maintains residences in Laredo and San Antonio.”
From the Las Vegas Business Press:
“New legislation and rising land prices are helping fuel Southern Nevada’s condominium market. In 2003, vacant land prices averaged $202,100 an acre in the Las Vegas Valley, a 27 percent increase from the previous year, says Applied Analysis, a locally-based economic research firm. The southwest submarket reported the largest land appreciation at $244,200 an acre, a 32 percent increase over 2002.”
From The Washington Times:
“As home prices climb in the Washington area, buyers in the upscale home market can expect to spend more than ever before for a home with opulent features.
“Home price is not simply a function of the quality of construction and finishes, nor is it based solely on size. Prices often are based more on location. Buyers of luxury homes are sometimes looking for an exclusive, gated community; sometimes wanting plenty of land for privacy; and sometimes desiring a home as close as possible to Washington.
“Many buyers want to live in a planned community with recreational amenities and the convenience of a local retail center. Some luxury homes are found in developments with these amenities, often including a golf course.
“Other expensive homes are smaller homes in fashionable enclaves on small homesites.
“Priced from the $700,000s and up, upscale homes do share an abundance of opulent features such as hardwood flooring throughout the main level; two- or three-piece crown and chair-rail moldings; oversized ceramic-tile flooring; or even marble flooring in the baths and a master bath with a tub and a separate shower upgraded with more space, a seat, steam showers and multiple shower heads. ‘Walk-through’ showers with two doors or even without doors and just perhaps a glass-block divider are becoming popular for those homes with the space for an extended master bath.”
How silly that seems now.
Last but not least, here’s an excerpt from an article by Michael Gregory in Investment Dealers Digest that all of us should have paid more attention to:
“But despite the benefits of structure that allow them triple-A-status, events in recent years have shown that asset-backed securities have their own risks. The collapse of Heilig-Meyers in late 2000, the messy servicing transfer that followed and the ultimate disturbing recoveries to the once triple-A-rated bonds offer the clearest lesson of the huge risks for ABS investors.”
Happy new year!
Continue Reading Add comment December 30th, 2008
The activist group ACORN got a bad rap during the recent presidential campaign when John McCain accused them of using paid solicitors to sign up bogus voters. Barack Obama had to distance himself from the group, which has been a big advocate for low income homeowners.
ACORN has come out slugging against Hope Now, an alliance between banks, mortgage servicers and other consumer groups.
Says ACORN:
“HOPE NOW’s own numbers show that far less than a third of their nearly 3 million foreclosures prevented in 2008 actually involved modifications to the underlying mortgage, rather than weak repayment plans that do nothing to address the structural unaffordability of so many loans. The HOPE NOW estimate of 950,000 mortgage modifications in 2008 is a pathetic failure when stacked up next to the 2 million Americans who lost their homes. We don’t know how many of these modifications actually resulted in reduced monthly payments that are affordable to homeowners, the driving reason behind high re-default rates. Instead of more excuses, we need solutions that will stop all these unnecessary foreclosures and fix our economy where it is hurting most.”
The group also notes that Credit Suisse recently released revised projections that foresee 8 million foreclosures in the next four years, up from a prediction of 6.5 million in April. “The industry’s current bad practices are essentially responsible for doubling the foreclosure crisis and preventing the broad economic recovery we need. The mortgage industry doesn’t need any more PR, it needs systemic change.”
ACORN is calling on mortgage servicers to enact a 90-day moratorium on foreclosures, taking that time to implement the FDIC’s modification protocols that were successful at avoiding unnecessary foreclosures and re-defaults at Indymac. This change alone would stem the glut of Real Estate Owned properties that are dragging down housing prices and would help jumpstart the economic recovery. The federal government must use every stick and carrot at its disposal to help Americans save their homes, including enacting the Bair proposal to use TARP funds to facilitate 2.2 million mortgage modifications, lifting the ban on judicial modifications, and demanding that banks receiving TARP funds start modifying loans per the FDIC protocols.”
Continue Reading Add comment December 30th, 2008
SL Green Realty Corp. has slashed a planned dividend payment in efforts to pay down debt and conserve funds for future investments. The company set the new dividend payment at $0.375 per common share for the fourth quarter of 2008. The third quarter dividend was $0.7875 per share.
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